Originally Published MX September/October 2005
BUSINESS PLANNING & TECHNOLOGY DEVELOPMENT
A Crisis Defined|
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The U.S. healthcare system has been in critical condition for some years now. The crisis, noted by many, surrounds issues of cost, access, and quality.
Rising Costs. Healthcare provided in the United States is the most costly in the world, and its costs are rising rapidly. In 2003, the U.S. spent $1.7 trillion on healthcare, more than 15% of the federal budget.1 That was about $5800 per capita, more than twice what the nations of Western Europe and Canada have been spending. Over the next 10 years, Medicare alone is expected to grow to consume 20% of the budget—and that doesn't include private healthcare spending or other government programs such as Medicaid.2
Falling Access. The high cost of healthcare is forcing larger employers to shift more of the expense onto employees, some of whom choose to, or are forced to, forgo their employer-sponsored insurance because of the cost increases. Many smaller employers have stopped offering health insurance altogether. Since 2000, partly as a result of these trends, the number of uninsured Americans has risen by 5 million, to 45 million, or nearly 16% of all Americans.3
Lack of insurance is no longer a problem solely of the lower and working classes; it is hitting the middle class too. More than half of the newly uninsured have annual incomes above $75,000.4 While uninsured people do get charity care, the care delivered is often too little too late. The uninsured have a 25% higher mortality rate than the insured at all ages, including children.5
Questionable Quality. Difficulties of access aside, the conventional wisdom has been that those Americans who do have insurance receive the best healthcare in the world. But a recent study showed that that popular belief is flawed. The researchers found that doctors provide appropriate healthcare only about half the time on average. This results in tens of thousands of preventable deaths each year, as well as morbidity traceable to inappropriate care.6 In major morbidity and mortality health statistics, the United States ranks below Canada and most nations of Western Europe. The United States ranks 29th in life expectancy in the world, behind Japan, Canada, Israel, and the nations of western Europe, including Spain, Italy, and Greece. The country is tied with or behind such notables as Barbados, Cuba, and Costa Rica.7
Medical Technology Part of the Solution. The U.S. healthcare system is in need of major change. Clearly, to improve the benefits realized from healthcare expenditures requires maximizing value. System efficiencies can be improved by streamlining access to medical information. Also, changing system incentives, by paying for performance and prevention and increasing patient accountability and responsibility, should help. But increasing the quality and value of the healthcare that U.S. patients receive will depend to a significant extent on the considerable effort of the medical device industry to develop new medical technology.
According to an AdvaMed report issued in 2004, in 2002 the medical device industry spent 11.4% of sales receipts, or more than $8.5 billion, on research and new product development.8 Medtech manufacturers that can show with data that the products emerging from their development laboratories will improve the quality and value of healthcare rather than simply add cost to the system will have the satisfaction of contributing to resolution of the U.S. healthcare crisis while also securing reimbursement and a market niche for themselves.
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